Why Safecoin should have a fixed transactionfee

#1

I’ll start this by saying that, I have no clue how a Safecoin will look like eventually.

Fee

Bitcoin got a problem, that problem is transactionfees. Fees are necessary to give miners an incentive, to keep the blockchain save. Sure the fee can be adjusted, but why not HARDCODE the fee, to solve the problem? The answer is, the fiatprice is constantly changing, so the fee constantly needs to change to look acceptable.

Units, the unit thing

There are 3 Bitcoin units, BTC, mBTC and μBTC. IMHO here is where the problem of the transactionfee lies. Most of the cryptocurrencies out there basically got this unit thing. I hear you asking, what does this have to do with transactionfees? Well it’s simple, if you want to use every bit and minimize the cost of an transaction, why not think/do different? If you would make μBTC = BTC and take away the other 2 units (BTC/mBTC), you would use every bit.

Moneyenom

Moneyenom is the second cryptocurrency that does microtransaction well, Xrp is the first (0,0001XRP per TX). Every Moneyenom transaction is hardcoded (0,01MYM), the thing is, this is the lowest fee in the Moneyenom setup. I’ll also admit that I have worked on the project and it could have been the king of small transaction fee, if only people gave it a change (Why is Ripple not the king? IMHO because they destroy the 0,0001XRP, instead of giving it to miners). The problem we had with Moneyenom, we didn’t have any giveaways (that’s why people hated it), it was also 100% premined (that’s why people hated it even more), to top it off, it’s being sold on the term of 1 coin is 1 euro in a webstore, ridiculous.

Seeing = Believing

I’m absolutely not here to advertise Moneyenom, but if you see how it’s transactioncosts setup works, you’ll get what I mean, by saying that Safecoin should have a fixed transactionfee. When you got a fixed transactionfee, you no longer have to worry about that part of the coin and you can focus on more important things. I foolishly assume, that Safecoin might have a “unit thing” like the other cryptocurrencies out there, but that’s just me being foolish with no proof. Till so forth what I’ve read about Safecoin, it will be the most revolutionary coin since Bitcoin. If you want to really see what I mean, you can download the Moneyenom client and post your Moneyenom address. I will send you 0,50MYM, if you send me back 0,49MYM, 0,01MYM will go to a miner and you’ll know exactly what I mean.

Advantage/Value through fees

In the old world high fees basically robs people, so it’s absolutely not recommended, that you bring out a cryptocurrency with that same idea. People sometimes ask about the value of Safecoin, beside merchants accepting it I’M GONNA REPEATE THIS A BILLION TIMES, it should also have the lowest transaction fee I’M GONNA REPEATE THIS A TRILLION TIMES. When looking at setups with low transactionfee, I see Ripple (0,0001), Bitcoin ($0,10), Dwolla ($0,25) and Moneybookers (0,50 euro). If Safecoins can have a guaranteed transactionfee of $0,01, that’s another reason for people to use it instead of others. Allthough most of the time, you’ll read me saying that I will be out there to help/get merchants to accept Safecoins, TXcosts are also superimportant and actually the primairy reason why I would personally use a coin. I just hope that Safecoin doesn’t have the “unit thing” and that it got the lowest transaction fee, because that will give it another plus on the scoreboard.

Safecoin Domains

When I say using every bit, I really mean using every bit. What if every transaction was 0.01 Safecoin? What if Safecoins had DNS like Namecoin and to register a domain, it would cost 0.01 Safecoin and for that money, you would get a domainname for 2 years? (the why for 2 years? is simple, because you pay 0.01 Safecoin for a 1 year registration and 0.01 Safecoin for transaction, you get 2 years). This would allready give Safecoins more value then Namecoin, now imagine, if with Safecoins you could also add TLD and people could only register a name if they own the DOTCOM name. What if they could also bid on a domain?

#2

This makes no sense.

#3

Al_Kafir’s comment was about a FAQ, the FAQ is now updated into this wish

#4

Why is a transaction fee needed if we can do it without one? You’re asking for taxes. Transaction fees are taxes.

#5

This is, indeed, a rather confusing post, but behind it I think I see some merit–at least in what I THINK you’re talking about.

First, I am not quite sure what you mean by a “unit thing.” Please clarify what you mean specifically.

Now, thinking about it in the long term, eventually the hardcap on safecoin will be approached. As we go along it will be harder and harder to farm, but hopefully this will be offset by the continued increase in the value of safecoin. But still, it will come down to a point where little or no reward will be dished out by simply maintaining a vault and providing storage. By this point I imagine enough people will be otherwise vested in the system to want to keep it going, but still the hard reward will largely go away.

One of the proposals which work to counter this is recycling safecoin when it is used to purchase an increase in resource limit from the network. This makes sense and will help.

But the idea of a standard fee for transfer of safecoin is also a very good idea. It’s digital scarcity is it’s first claim to value, but the ability to transfer it is equally necessary to its value. The network enables both.

So a small, even seemingly insignificant, fee would be appropriate in exchange for the ability to maintain the integrity of safecoin way on into the future. At first it could be so small (like .00000000001 safecoin per transaction) that it wouldn’t be noticed costwise. But it would accumulate over time, and as safecoin gets more valuable and harder to farm, and as the volume of transactions increases over time, it could represent enough recycling to be a self-sustaining engine motivating maintanence of the network.

Very interesting. I like it in theory. @dirvine, what do you think?

The only downside I see at this point it would require the next level of divisibility be put in whenever such a transaction fee was implemented. I doubt the Maidsafe team would be up for this right away, but it might be worth it, if it means everyone knowing that the far, far future of viable safecoin farming is assured.

#6

Luckybit I have to disagree with you on this one. Taxes are forced payments for something that you might not like (To go to war, bail out banks etc). With TXfee you pay the people that keep the network up and running (I admit, on this network things might happend what you might not like), also everybody making use of it got to chip in.

Some systems (Ripple) use TXfee as anti-spam on the network, Maidsafe won’t really have this problem. If Safecoins had no TXfee @ all this would just put it on the top of the food chain.

#7

Not necessarily. A minute transaction fee could just be the cost of maintaining the longterm viability of safecoin, and the network as a whole. It’s a minute cost that doesn’t go anywhere but back into the network as an incentive. It’s like recycling some of the oil in an engine. It can’t be used to line croney pockets. Just a very, very tiny cost for the features one gains in safecoin.

#8

Hi Fergish,
What I mean a “unit thing”, is simple Bitcoin is displayed in this way:
(BTC, mBTC and μBTC)

Litecoin is displayed like:
(LTC, mLTC and μLTC)

You can pick every cryptocoin out there just like Bitcoin they all have a level of divisibility. The thing is, you don’t need divisibility and in that way you can add the smallest transactionfee possible.

What if we could change the Bitcoin’s unit
Current setup of Bitcoin units

(BTC, mBTC and μBTC)

New setup of Bitcoin units

(remove this unit (BTC), remove this unit (mBTC) and replace μBTC with BTC)

With the new setup of Bitcoin units above your no longer talking about 0,00000001 BTC. Because your using the smallest unit (Satoshi), you can also use the smallest transaction unit. I don’t hope to be dealing with .00000000001 safecoin.

I don’t understand this idea that scarcity gives value to something. The repetitive nonesense of scarcity is what is keeping us all in the stoneAge. Diamonds are scarce let’s make them expensive (That while there is a diamond planet out there in space). Graphite is difficult to make, let’s make that expensive.

We humans have become so ignorant, that we don’t even know the value of what is really valuable anymore.

The sun is valuable, because it’s keeping everything on earth alive
Oxygen is valuable, because it’s keeping everything on earth alive
Water is valuable, because it’s keeping everything on earth alive (shower&drink)
Trees are valuable, because they’re keeping everything on earth alive
Food is valuable, because it’s keeping everything on earth alive
Sex is valuable, because it’s keeping everything on earth alive
Movement is valuable, because it’s keeping everything on earth alive
Peeing & pooing is valuable, because it’s keeping everything on earth alive
Family & Friends are valuable, because it’s keeping everything on earth alive

There those are my valuables, the rest of this indoctrination is just funny

Digital scarcity is a fairytale, if Google would decide today to create a Bitcoin and have a 1 followed by 100 zero’s, instead of 21 million coins, they would have everybody on their blockchain within 9 months.

#9

The “unit thing” still makes no sense to me. Are you saying that all of our day to day transactions should currently only be referred to in pennies only? i.e., Big Mac meal = 599 cents, Ferrari = 15,000,000 cents

Obviously you do not understand, but instead of just rejecting the idea, you might strive to understand what others are talking about when they refer to the concept of scarcity in reference to currency. If you have a question as to why it might be a factor in value, I’d be happy to give my input. Your flip response, however, doesn’t inspire me to give it the effort.

I do appreciate your initial post, though. It was a bit confusing but the concept of a micro transaction fee built into safecoin transfer is worth looking at.

#10

Wow. People don’t “make” them expensive. Why are $100 bills worth so much more than a $1? Because there are so many less of them. Roughly 100 times less. Why are large diamonds worth more than small diamonds? Because they’re harder to find. People want them. If almost anyone can reach into their pocket at any given time and hand someone a penny, should that have the same value as a $100? This is why scarce things have value.

I dont think we have become ignorant, I think most of us just have a grasp on the concept of simple supply and demand value system.

#11

Why would this happen? The Safecoins get recycled. Also if you make it harder and harder to mine as we get closer and closer to the limit then once again I don’t see a problem.

People would just mine a lot less digits. So what? Move the decimals.

#12

Safecoins are just digits in a ledger. They don’t have any value. The value is in the buying power each 1 Safecoin represents. As long as buying power increases then you’ll need less and less to get more and more resources.

Safecoins are divisible so we will never run out of them. I just don’t see the point to this discussion. I see a misunderstanding of the purpose of Safecoin (it’s not something which exists for it’s own sake but for the sake of growing SAFE Network).

And Safecoin once it reaches a point where its very hard to mine, we’ll have a very different world.

#13

This is just my own personal preference. I do not like transaction fees, or anything that is added to the sale price. It’s annoying to calculate and messes up my shopping experience.

Having said that, I do understand the need and special uses for transaction fees.

In the case of Bitcoin, where the ONLY function is to securely process transactions, they need to incentivize miners. I don’t think there will be many miners after Bitcoin reaches it’s cap, even with the transaction fee. In crypto mining, most people race to the low hanging fruit. They hop from one alt coin to another, seeking the highest payout.

In the case of Safecoin, the farmers look after ALL data, not just Safecoin ownership transfers. GET requests are the source of a farmer’s income. The “Network Utilization” model recycles Safecoin that is used to buy extra storage, known as premium PUT requests.

After CAP Solution: Right now, the SAFE Network pays farmers on GET requests until 4.3 billion Safecoins are created. Thereafter, the Network could charge the user & pay the farmer on the GET requests. It can use a similar algorithm to the “Network Utilization” model to determine the cost/payout amount. This also makes Safecoin semi exclusive to the Network because it is “required” to access any data on the Network.

Instead hoping transaction fees will sustain the farmer, they just maintain the same income. “Please don’t leave us, farmer John!” The only difference will be the consumer takes the place of the Network in paying the farmer.

Q: Does this mean users will no longer pay for premium storage after the CAP?

A: Yes, I expect the Network to be large enough that an upload limit will not be necessary. This means people will be free to upload as much as they want. WHOO HOO!

The flip side is… they will have to pay “usage” fees based on their GET requests. Storage may be cheap, but electricity and bandwith will be the main cost for farmers. I believe farmers should equate those costs to their income.

Q: Why not just implement the “usage” model now?

A: Because the only people who have Safecoin is the investors/early adopters. How likely are they to spend their Safecoin?

#14

Just wanted to point out that you pulled the above out of a post were I was responding to another’s comment. It makes it look like I said those things. I really don’t want to claim them as I was posting it in order to disagree. :smile:

#15

Interesting model. Have to think about it.

I’m looking at a rather small micropayment per safecoin trade, whether same for every transaction or perhaps a tiny-weeny percentage. True, the network does more than safecoin, but the vaults that sustain the network are sustained by safecoin.

The network should be capable of handling millions of transactions per second. If safecoin becomes a major stable fixture in commerce, an almost unnoticable percent fee for transfering the value (to compensate the network for the effort) could add up very fast and sustain the store of safecoin to mine–a lessened rate, but a more valuable ore. [oops. change that mining analogy to an farming one. quick!]

This would have the additional advantage of not having to have a transition point.

Just thinkin’.

#16

I’m just horrible at explaining, but if I could go back in time, I would advise Satoshi Nakamoto to hardcode the transactionfee at 0.00000001BTC for every Bitcoin transaction. If the Bitcoin folks change this right now, it would be the cheapest cryptocurrency out there, transferwise.

Your right Wes, here is a great example of professionals at work
LOL, but I guess that I’m selling “the laughing stock”.

Luckybit, if Safecoins are indeed divisible like Bitcoin, we should consider setting the transactionfee (for example to 0.00000001 Safecoin), that way you don’t have to constantly change the transactionfee (like with Bitcoins) and you will attract more people to the coin (because what is better than cheap transactioncosts?).

Let’s say that a GET request is a medical data of a person, if farmers are allowed to set a price for a GET request, they could put somebody’s life in danger in an emergency situation, you don’t want people to set a price. With the lowest possible TXfee your not really taxing people heavily and farmers would still be incentivized, because they could be getting millions of GET requests.

#17

The cost of the GET request is set by the Network. See my own quote below.

Saying, the hospital or patient or insurance cannot afford the small GET request fee, is like saying the patient may die because they can’t pay for $1 stitches during a $10,000 operation.

EDIT: My mother has been in 3 emergency situations and they NEVER wait to get medical records or payment. Treatment was always determined by the ER doctor.

#18

And then the miners would have much less incentive to mine for transactions fees once we’ve reached our cap. It’s hard enough to keep the pool decentralized even with the current reward system, and you want to make it less rewarding? Silly.

Basically everyone in the modern world needs oil to go about their daily lives. If oil is about to become scarce, then people are willing to pay more for it. If you needed food, and there was only 10 loaves of bread left in your whole state for the next 3 weeks and no way to make your own, wouldn’t you pay $50 a loaf to get them?

How about NO transaction fee?

#19

No fee would be nice, and most likely how it will be.

There will be some recycling with purchasing of higher storage caps from the network. Don’t really know how much that will add up to, and I suspect it won’t be enough to keep the farming cycle going.

Making an ongoing loop to recycle safecoin, enough to continue to incentivize vault maintanence, seems like a good idea to assure everyone that the network has the mechanism to be maintained forever. That mechanism may exist and just not be apparent to me.

But really, though, everyone contributing a tiny percentage per transaction in order to maintain a stable, decentralized and politically neutral medium of exchange is philosophically sound. You pay for fiat money with inflation, social control, war, cronyism, etc. Even a hard asset like gold you pay storage, assaying, etc., which add up to quite a lot percentage-wise.

I don’t know how technically workable the per-transaction micropayment concept is, or if the long-term sustainance is otherwise figured in by the Maidsafe core team (wouldn’t surprise me at all), but I wouldn’t find it burdensome to pay, say, 1/100 of one percent fee to transfer. That would mean, I believe, that for every ten thousand times a whole safecoin were transferred in commerce, one would come available to farm as an incentive for maintaining not only safecoin, but the entire data and communication facility that the network provides.

#20

I don’t think op knew that the current plan for safecoin is no transaction fees.